The Bangko Sentral ng Pilipinas (BSP) on Tuesday, 28 October, reaffirmed that it allows the peso’s exchange rate to be determined by market forces, saying the recent depreciation reflects market concerns and broader economic sentiment.

In a statement, the central bank said that while it occasionally steps into the foreign exchange market, such participation is mainly intended “to dampen inflationary swings in the exchange rate over time rather than to prevent day-to-day volatility.”

The BSP emphasized that the peso’s recent weakness may mirror market concerns over a possible moderation in economic growth, following controversies surrounding infrastructure spending and expectations of further monetary policy easing by the BSP.

Despite the depreciation, the central bank maintained that the peso remains supported by strong underlying fundamentals, including resilient remittance inflows, steady economic growth, low inflation, and continuing structural reforms.